2022 Insurance Market Trend Report

BY LISA BOLDUC

Over the last decade, workers compensation premiums have been reduced exponentially. Companies who were paying $500,000 in annual workers comp premium now pay $50,000. That is a substantial, favorable difference on the bottom line. What drove this difference? The worker’s compensation market has been softening steadily; state and carrier filed rates are reduced. Simply put – it is what the market is bearing. Insurance markets are cyclical, inconsistent and dependent on a myriad of factors. 2022 has felt more energetic from a carrier-broker partnership perspective. Our carrier partners are actively pursuing to meet with brokers and agencies in person. Underwriting models were more conservative, focusing on underwriting scrutiny, rate increases and profitability over the past couple of years. Carriers are getting more aggressive and flexible when it pertains to new business. This is beneficial for companies that have favorable risk profiles and maintained a relationship with their incumbent carriers.

The $5 billion global insurance market will continue to evolve and be subject to market trends. Property & Casualty lines have different contributing factors and considerations. There is an air of optimism in our conversations with underwriters but still some friction within the details of specific risk profiles. See below for a quick summary by line of coverage.

PROPERTY

Weather and climate disasters exceeded $1 billion in 2021. Valuation remains a concern especially with recent inflation. Rate increases and capacity challenges remain for certain classes of business, like agriculture, mining, habitational and chemical to name a few.

CASUALTY

Insurers are eager to write new business. This is the case for primary workers compensation, general liability, automobile and umbrella/excess insurers for accounts less than $500 million in revenue and small-to-medium fleets. Auto liability losses remain prevalent, but, surprisingly, product liability losses have grown at a higher rate. Keep this in mind when determining appropriate umbrella and excess limits. Risk transfer is also a method to protect the balance sheet resulting from liability losses.

INTERNATIONAL

This line continues to be highly profitable for insurers, which results in lower rates for buyers. Global litigation is much more suppressed compared to the litigious environment within the U.S. There is a war exclusion on most policies, including global policies. However, insurers are observing the Russia and Ukraine Conflict because there are ancillary coverages for political and security evacuations.

CYBER

Price increases remain over 50% for most buyers. There was a slight decrease in claims in 2021, but they are still up 70% from 2019 and 250% from 2017. The claims are more sophisticated, which are associated with larger claims expenses. Underwriting information is scrutinized, and system security requirements are enforced for buyers. Also, limit capacity continues to be restricted and self-insured retentions continue to increase. NDFA and NDSA members should understand system access points and understand that cyber criminals are targeting manufacturing industries.

For more information on various insurance related issues and options, contact Brown & Brown at https://www.bbrown. com/contact/.

Lisa Bolduc is an assistant vice president at Brown & Brown, the fifth largest insurance brokerage in the nation. She is a board member for the Northeast Dairy Suppliers Association, Inc.